US tsys trading lower 10Y 2.275 (+2.5bps), focus on FOMC meeting later this aft. Tsys fell o/n with core Euro bonds on recovery in risk assets as China stocks rose 3.0%. Bunds, gilts lower even as Greece 10Y ~43bps higher as Tsipras warns of snap elections, bailout talks begin in Athens. US pending home sales later this morning followed by supply – $35bln in 5Y notes and $15bln 5Y notes at 1:00. In Canada, GOC are lower, spds unch vs tsys , except in 2s on central bank policy divergence, oil hovering near the lows .Provis unch – QC 45s 93.5 , Q45/O45 trading down at 4.5 , Ont 46s unch @ 89.
- Fed expected to push ahead with rate hike plan (Reuters) The Federal Reserve is expected on Wednesday to point to a growing U.S. economy and stronger job market as it sets the stage for a possible interest rate hike in September.
- Russia Calling Off Dollar Buying Bolsters Ruble as Oil Slides (Bloomberg) The ruble ended five days of losses as the Bank of Russia said it was stopping daily purchases of foreign exchange, signaling policy makers don’t want to add impetus to the currency’s decline before an interest-rate decision this week.
- Carney Begins Final Countdown to Bank of England Data Overload (Bloomberg) Brace yourself. Mark Carney is about to unleash a flood of data in one fell swoop in what will be an unprecedented move for a major central bank. Instead of staggering releases over two weeks, the Bank of England will on Aug. 6 simultaneously publish its policy decision, minutes of meeting, officials’ votes and new forecasts covering every facet of the economy.
- US Treasuries market faces liquidity concerns (FT) Investors are asking themselves a question that until recently had never been up for debate; how “liquid” are US Treasuries?
- U.S. trading revenues a sign of caution for Canadian banks (FP) Better-than-expected second-quarter results for most U.S. financials bode well for Canadian banks in the third quarter, but trading revenues are expected to be a major factor driving sector valuations.
- Overview: IG24 5Y 70.1/70.5 (-0.7), US 10yr note futures are down -0.16% at 126-25+, S&P 500 futures are up +0.10% at 2089.25, Crude oil futures are down -0.90% at 47.55, Gold futures are down -0.16% at $1095.0, DXY is up +0.05% at 96.817.
US Economic Data
- MBA mortgage applications came in this morning at 0.8% for the week ending July 24th, versus prior week 0.1% increase.
- Pending home sales are forecast at 0.9% MoM (11.1% YoY) in June versus May 0.9% MoM (8.3% YoY).
- FOMC Rate Decision is schedule at 14:00.
Canadian Economic Data
- There is no major economic data today.
Disclosure and Disclaimer
The following sources of information have been, or may have been, used partially or in their entirety to compile the herein provided CTI Capital Securities Inc. (“CTI Capital”) ‘Morning Comments.’ CTI Capital believes these sources to be generally reliable, however, as said sources are varied and from third parties, CTI Capital cannot guarantee the accuracy or completeness of said information: Canadian Press (CP); Bloomberg News (BN); Wall Street Journal (WSJ); Stone & McCarthy Research Associates (SMRA); New York Times (NYT); Financial Times (FT); Market News International (MNI); Globe and Mail; Associated Press (AP); CNW Group (CNW); Reuters; Business News Network (BNN); Market Watch; and others.
Ivan Greenstein, Stephan Buu, Pierre-Olivier Boulanger
Institutional Bond and Equity Desk
CTI Capital Valeurs Mobilières Inc.
Tel : (514)-861-0240